Market Turmoil Presents Traders with Valuable Opportunities…
Global markets have had to endure tumult in recent days. For the week ending Friday, 10 June, equities markets were sharply lower from Asia through Europe and the Americas. Brexit fears continue to weigh heavily on the minds of investors and a series of recent Brexit polls indicate a growing number of Brexiteers, contrary to what was expected. One of the first casualties in this volatile trading environment is the GBP and the sterling has come under intense selling pressure as a result.
The GBP/USD currency pair has weakened dramatically and bearish sentiment is pervasive. The latest ORB survey revealed that 55% of eligible Britons would vote to leave the European Union while just 45% want to remain. It appears that sentiment is focused on the issues of immigration and border safety, as well as the burden that is being placed on the National Health Service and other UK public institutions. The online poll had a sampling size of 2,052 respondents. The GBP was pounded from all sides as it dropped 0.8% against the euro and 1.4% against the greenback.
In the US, the shockwaves from Brexit fears were felt on all major indices on Wall Street. The S&P 500 index, the NASDAQ composite index and the Dow Jones all ended lower, and this trend is expected to continue throughout the week as the dual effects of the Fed interest rate announcement after the FOMC meeting on June 14-15, and the upcoming Brexit vote eight days later. The Fed is unlikely to hike interest rates at such a critical juncture in the global economy, given the latest Brexit polls.
1 – Analysts’ perceptions of the GBP/USD currency pair
As mentioned earlier, the pound has had a torrid time of late. It slipped 1.4% against the greenback to $1.426. The GBP has been the worst-performing currency of the G-10 currencies for 2016. For the year to date, the GBP/USD pair has shed 1.86% which isn’t entirely a train smash given the resilience of the sterling. The pair started the year at $1.4738 and is now trading at $1.4255.
